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Quebecor will keep to existing strategy, Pierre Karl Péladeau says

As media and telecom giant reports $123M in fourth-quarter profit, returning CEO talks about staying the course. But a former pension-fund executive says Quebecor will have to make some changes because its investment in traditional media is just breaking even.

Pierre Karl Péladeau, president and chief executive of Quebecor Inc., returned to the company in February after a short-lived political career. (Paul Chiasson / The Canadian Press file photo)

By Ross MarowitsThe Canadian Press

Wed., March 15, 2017

MONTREAL—Quebecor CEO Pierre Karl Péladeau vowed on Wednesday to stick to the media and telecommunications company’s existing strategy as he returns to its helm after a brief stint in politics.

“I can only be optimistic about our future as we will maintain the strategic direction, notably based on the convergence of value-add content and distribution platforms that served us so well over the past 16 years,” Péladeau told financial analysts Wednesday during a conference call to discuss the company’s latest results.

They were his first public comments since returning to the CEO role last month at the company founded by his father. Péladeau, 55, had held the job for 14 years before entering politics as a Parti Québécois candidate in the 2014 provincial election. He was elected party leader in 2015, but resigned a year later.

He said the company has been successful by disseminating content across its network of cable, cellphones, TV, newspapers, magazines, music, live entertainment and books.

“We will continue in this direction and it looks like we’re far from being the only ones right now to follow this route because there’s a lot of telecom communications that have been moving in this direction.”

And he said he expects new ways to distribute content will emerge over the coming years.

Since Péladeau last headed the company, Quebecor has seen the growth of its wireless business, loss of cable subscribers and a media division that faces lower advertising revenues. Late last year, it cut 220 media positions in a restructuring that contributed to an 11-per-cent increase in the division’s fourth-quarter adjusted operating profits.

Michel Nadeau, a former top leader at Quebec pension fund manager Caisse de dépôt, which owns almost 19 per cent of Quebecor Media, has said Péladeau will have to find new solutions for the media and the telecommunications industry problems.

The strong cash flow from the Vidéotron cable and wireless operations gives Péladeau time to craft a response, but Nadeau said Quebecor will have to make some changes because its investment in traditional media is just breaking even.

Meanwhile, Péladeau was reluctant to comment on the potential sale of Quebecor’s wireless spectrum outside of Quebec or the purchase of the Caisse de dépôt’s stake in Quebecor Media.

During the fourth quarter, Quebecor reversed a year-ago loss by earning $123.3 million or $1.01 per basic share in the three months ended Dec. 31. That compared with a $34.8-million loss or 28 cents per share in the fourth quarter of 2015.

The company said the improvement was mainly due to a $135.7-million variance in the value of financial instruments.

Its revenue was up 2.6 per cent at $1.05 billion.

Quebecor class B shares closed up 4.2 per cent at $39.53.

Quebecor owns an 81-per-cent stake in Quebecor Media, which holds the Vidéotron cable and telecommunications company and TVA Group broadcaster, Le Journal de Montréal and Le Journal de Québec as well as other media businesses.

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